Google Surprises Employees with a Bonus and a Raise

There’s a reason why Google is routinely at the very top of Fortune’s list of best companies to work for. The company has given all its employees a salary increase of 10% or more, as well as a $1,000 cash holiday bonus, Business Insider has learned from a source.

According to the same source, Google will pay the taxes for the cash bonus and give each employee an additional raise equivalent to their target bonus for the year.

An internal memo from Google CEO Eric Schmidt confirms the raise and the bonuses. “We’ve heard from your feedback on Googlegeist and other surveys that salary is more important to you than any other component of pay (i.e., bonus and equity). To address that, we’re moving a portion of your bonus into your base salary, so now it’s income you can count on, every time you get your paycheck. That’s also effective January 1st. You’ll be receiving an email shortly with further details about these changes to your compensation. And one last thing…today we’re announcing that everyone will get a holiday cash bonus, too,” the memo said.

A Google spokesman didn’t provide any details, but also hasn’t outright denied the story. “While we don’t typically comment on internal matters, we do believe that competitive compensation plans are important to the future of the company,” the spokesman said.

From the employees’ perspective, that’s a lot of good news. From Google’s perspective, that’s a significant cost: the Internet giant has over 23,000 employees, and only the cash bonus will cost it $23 million, while the raise might cost Google around $1 billion a year. Judging by Google’s impressive earnings report from October, however, Google can definitely afford such a move. With the economy still being weakened by the recession, Google obviously wants to show off its s